Automotive marketplace Carsales.com has selected PromisePay as payment provider for its 20 global platforms and has made an equity investment in the Melbourne-based fintech start-up. PromisePay has just closed a $14 million Series A funding round to drive growth in the United States.

Cultivation is led by Square co-founder Jim McKelvey, who has been working closely with PromisePay. The start-up is seeking to provide services to the global "platform economy", which The Centre For Global Enterprise estimates to have a total market value of $4.3 trillion.

Other PromisePay investors are 99Designs co-founder Mark Harbottle and former Hitwise CEO Andrew Walsh, who joins PromisePay as chairman of the board. The company would not disclose any detail on valuation.

Co-founder and CEO Simon Lee describes PromisePay not as a payments player but a "trust and risk" company. While some websites provide payment gateways, many leave it to the parties transacting to work out how to pay for goods or services offered on the sites.

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But marketplaces have not been not well-equipped to deal with in fraud management, end-user support and dispute resolution – services with PromisePay provide. It also stands in as an insurer, taking losses of marketplace customers. It sells "chargeback protection" and dispute resolution recovery for operators. It also offers escrow and identity verifications services.

Growth opportunities

Clients include website name trader Flippa, freelancer jobs sites Airtasker and My Jobstream and tradies hire site, hipages. PromisePay has 40 customers in Australia and the US, where Mr Lee said growth opportunities are most encouraging. Its big competitor is US-based Braintree, whose clients include Uber and Airbnb.

PromisePay opened its second US office in St Louis this year after opening in San Francisco. It also has an operation in Manila, Philippines.

Based in the Melbourne suburb of Collingwood, PromisePay has expanded beyond marketplaces, to provide payments solutions for, crowdfunding, job management, booking and accounting platforms. Mr Lee said this was possible due to advanced APIs [application programming interfaces]. Launched in 2014, the company says it grew its revenue 25 per cent month on month in the past year, doubled the number of direct sign ups every quarter and tripled its headcount.

PromisePay was the fourth investment from Reinventure Fund. Its co-founder Simon Cant said: "We expect to see that continue over the next couple of years and this funding will help them accelerate that growth and further scale the business."

The investment will provide Westpac with insight on how the payments ecosystem for commercial online markets is developing and will link PromisePay to expertise at the bank.

PromisePay is working with banks, who are interested in the sophistication of the risk tools that are being built over the open API. But as banks struggle to capitalise on their dominance of payments infrastructure to online marketplaces, Carsales founder and CEO Greg Roebuck said no other financial services player was able to compete with PromisePay's offering.

"We searched extensively for a provider that could bring trusted payments to our marketplaces, and PromisePay was uniquely able to do so," he said. "Carsales has a strong track record of backing innovative technologies that deliver materially better experiences and outcomes for our members and look forward to watching and supporting PromisePay's growth."

It is understood several other local VCs wanted to participate in the Series A raising but were closed out, as PromisePay seeks to move forward with a tight register of supportive investors. rampersand co-founder Paul Naphtali said PromisePay are "already they are a great example of a homegrown start-up making a global impact".

Andrew Walsh said he would watch PromisePay evolve "from disruptive startup to global powerhouse in the fintech space." Earlier investors include St Louis-based accelerator SixThirty and Kima Ventures, a fund backed by French entrepreneur, Xavier Niel.

Mr Lee has previously worked as a consultant for National Australia Bank and ANZ Banking Group in cloud strategy. The other two co-founders are chief technology officer Simon Jones, who has worked with Telstra, Ericsson, NEC and Fujitsu; and Darran McMurtrie, the chief experience officer, who has a design agency background with clients including Standard Chartered and ANZ.